Tweet
12 December 2011
The European Union Is No Different Than Russia and China?
I was astonished when I started to read what promised to be an interesting piece about the Fed swap lines that Chris Whalen thinks that with regard to political and economic freedom there is no distinction among Europe, Russia and China. Perhaps he is writing from the perspective of his banks.
And don't step out of line or speak up because you may be pepper sprayed at will.
But more interestingly, it seems likely from my read of the demimonde that the States are going to diverge from Europe once again in some greater policy matter, probably involving a domestic shock like nationalizing the banks, or even a military solution to a nagging problem. And this piece from Chris Whalen may just be an advance serving of 'freedom fries' with extra ketchup and a side of jingoism.
http://jessescrossroadscafe.blogspot...rent-than.html
Wealthy Patriots Wage Class War
Janet Tavakoli
Posted: 12/12/11 08:48 AM ET
A strange thing happened in Chicago on Thursday, December 8. An audience of well-heeled professionals, a mixture of Democrats and Republicans, packed a room at the Drake Hotel to hear Robert Shiller, a Yale professor, give a presentation on the housing market. A few members of the audience were in the top 1%, and the balance of the audience was probably in the top 2%-5%. At the end of the presentation, there was a bi-partisan revolt.
The Chicago Mercantile Exchange (CME) and the Chicago Council on Global Affairs (CCGA) jointly sponsored the presentation. I'm a donor to CCGA's president's circle. Professor Shiller, deemed one of the country's foremost housing authorities, proposed a futures index for hedging and a new type of mortgage loan product along with some historical filler. In the context of our recent housing debacle, he never once uttered the word "fraud."
Fraud "Blind Spot"
Shiller's speech was 2 ˝ years after I appeared on C-Span talking about the many aspects of widespread interconnected mortgage fraud that damaged the global financial markets. I summarized fraud's significant role in the 2008 financial crisis in a book called Dear Mr. Buffett.
Shiller's speech was months after Congressional investigations showed how Wall Street firms provided financing for fraudulent loan activity of a number of different loan originators by creating fraudulent securitizations.
His speech was also months after widespread reports of robo-signing of affidavits and other types of foreclosure fraud. Banks showed up in court with fraudulent documents, which is fraud on the courts.
The Yale professor's speech was just four days after 60 Minutes blew open widespread loan origination fraud at Countrywide (video below). The firm created fraudulent documents. Separately it was reported that in Countrywide's Chicago office, 90% of loan applications were altered and income was sometimes inflated by Countrywide employees, not by borrowers. Countrywide settled a well-publicized fraud lawsuit for $8.3 billion with several states including Illinois.
Shiller's talk was the day after former Illinois Governor Rod Blagojevich was sentenced to 14 years in prison after his corruption conviction.
Shiller spoke on the same day that Jon Corzine, former CEO of bankrupt firm MF Global (former Democratic Governor of New Jersey, former Democratic Senator from New Jersey and former CEO of Goldman Sachs), testified before Congress that he had no intention to break the rules but he just doesn't know what happened to an estimated $600 million to $1.2 billion of customers' assets. Customers' money disappeared from segregated accounts that should have been intact but were not. See also: "Jon Corzine Dodges the Fraud Question," Huffington Post, December 9, 2011.
Audience Calls for Integrity
Michael Moskow, current vice-chairman and senior fellow on the global economy at CCGA and former head of the Chicago Federal Reserve, stood at the podium as Robert Shiller took questions from an upset audience. One attendee noted in an email to me that questioners were professionals, "not the Occupy Wall Street crowd who were accused of inciting 'class warfare' at the podium."
During the brief Q&A two men, one a former long-term Wall Street professional, asked questions about how we move forward when there is so little confidence. They cited the lack of integrity in the global financial markets.
After that, I asked how one creates a futures index (as Shiller proposed) in which one can have confidence without acknowledging the existence of fraud and vigorously prosecuting fraud. There was fraud by loan originators, fraudulent securitizations, and even fraud in the residential mortgage backed securities (RMBS) that backed a different hedging instrument, the ABX index.
The first time the word "fraud" was uttered that evening was when I posed my question.
Shiller himself never used "fraud." The most he would say in his so-called response was "some people aren't very nice." Really? It sounded rehearsed, and it struck most people in the audience as a shameful cop-out. If this is what economists are teaching students at universities, students should demand a refund of their tuition. Kindergarten children are given better warnings about strangers with candy.
"Countrywide Broke the Law. Homeowners Did Not."
Even worse Shiller, intentionally or otherwise, distorted my meaning. He claimed borrowers inflated income, without citing a source. Some of that occurred, but that wasn't what I referred to in my question. I corrected Shiller. I had clearly referred to instances where Countrywide altered documents and put in higher income amounts so that the mortgage loans would be approved for people that could not afford them. [Illinois Attorney General Lisa Madigan stated: "Countrywide broke the law. Homeowners did not."] Moreover, Shiller completely dodged the issue of fraudulent securitizations and foreclosure fraud.
CCGA and Academia Need to Get Their Crimes Straight
As if in a continuation of his answer to my question, Shiller mentioned he had spoken with a cab driver (apparently the source of all man-on-the-street information for academics) and the cab driver had no savings, only debt. Robert Shiller and Michael Moscow, the retired head of the Chicago Fed, appeared smug to me about this anonymous struggling working man's plight.
They seemed to be promulgating what Elizabeth Warren calls the "myth of the immoral debtor." Yet being in debt or even going bankrupt is not a crime in the United States. Loan originators' submission of fraudulent documents is a crime. Securities fraud is a crime. Foreclosure fraud is a crime.
Afterwards, several people came to me and to the other questioners. Much of the audience complained to CCGA's conference organizers. All were disappointed in Professor Shiller. A male CPA in the audience later contacted me via my website and wrote that he was glad I had put the question to Shiller: "though I have a great deal of respect for him, I was disappointed in his 'response' (if you could call it that)."
One woman who earned a Ph.D. in history found Shiller's response to me "incoherent:"
Alumni of the Federal Reserve, corrupt politicians, and willfully blind academics would be correct to say that evening was a case of "class warfare." Well-heeled U.S. patriots declared war on the lack of class demonstrated by their financial peers.
http://www.huffingtonpost.com/janet-..._1142946.html?
The European Union Is No Different Than Russia and China?
I was astonished when I started to read what promised to be an interesting piece about the Fed swap lines that Chris Whalen thinks that with regard to political and economic freedom there is no distinction among Europe, Russia and China. Perhaps he is writing from the perspective of his banks.
"Many readers of The IRA have asked us in the past several months if we despair for the future of the United States and the economic system built upon the much abused dollar. The short answer is no; we at IRA are bullish on the United States, in part because the very democratic freedom that allows Americans to commit acts of libertine stupidity is also our greatest strength.
No matter how much gold is stored in the central banks of the nations of the old world such as China, Russia and the European Union, these nations are not democratic. No amount of monetary rectitude will offset the fact that the peoples of the old world are not free to act, either in political or economic terms."
Chris Whalen, The Fed as the New Global Aristocracy
Contrast that expression of American financial triumphalism with this blistering comparison of the Arab protests and the Occupy Wall Street Movement.No matter how much gold is stored in the central banks of the nations of the old world such as China, Russia and the European Union, these nations are not democratic. No amount of monetary rectitude will offset the fact that the peoples of the old world are not free to act, either in political or economic terms."
Chris Whalen, The Fed as the New Global Aristocracy
"And that is the true parallel in the West. The protest movements are indeed against Big Business – a perfectly justified cause – and against "governments". What they have really divined, however, albeit a bit late in the day, is that they have for decades bought into a fraudulent democracy: they dutifully vote for political parties – which then hand their democratic mandate and people's power to the banks and the derivative traders and the rating agencies, all three backed up by the slovenly and dishonest coterie of "experts" from America's top universities and "think tanks", who maintain the fiction that this is a crisis of globalisation rather than a massive financial con trick foisted on the voters.
The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people's wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine."
Robert Fisk, Bankers are the Dictators of the West
According to Janet Tavakoli (below), even the well-heeled and highly educated are beginning to show their puzzlement and disgust for the blatant cover up of fraud as demonstrated in this instance of the credibility trap.The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people's wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine."
Robert Fisk, Bankers are the Dictators of the West
"Afterwards, several people came to me and to the other questioners. Much of the audience complained to CCGA's conference organizers. All were disappointed in Professor Shiller. A male CPA in the audience later contacted me via my website and wrote that he was glad I had put the question to Shiller: "though I have a great deal of respect for him, I was disappointed in his 'response' (if you could call it that)."
One woman who earned a Ph.D. in history found Shiller's response to me "incoherent:"
Perhaps Americans can revel in their unique freedom of action when they step to the voting booths next fall, and vote for one of the two choices offered to them by their corporate oligarchs, while their elected representatives continue to ignore massive bank frauds and the gaming of the system by the monied interests, now colloquially called the 'one percent.' One woman who earned a Ph.D. in history found Shiller's response to me "incoherent:"
I was with my husband, brother, and his wife. I chatted with the stranger next to me and at least two people escaping at the same time [leaving after the speech]. No one could believe what a huge "fail" the evening had been...the failure of our political and expert classes to address the core issues...have alienated even those working in the financial industry--right up into the rung below the top of the food chain...this feels like the Ancien Régime's last days.
Alumni of the Federal Reserve, corrupt politicians, and willfully blind academics would be correct to say that evening was a case of "class warfare." Well-heeled U.S. patriots declared war on the lack of class demonstrated by their financial peers."And don't step out of line or speak up because you may be pepper sprayed at will.
But more interestingly, it seems likely from my read of the demimonde that the States are going to diverge from Europe once again in some greater policy matter, probably involving a domestic shock like nationalizing the banks, or even a military solution to a nagging problem. And this piece from Chris Whalen may just be an advance serving of 'freedom fries' with extra ketchup and a side of jingoism.
http://jessescrossroadscafe.blogspot...rent-than.html
Wealthy Patriots Wage Class War
Janet Tavakoli
Posted: 12/12/11 08:48 AM ET
A strange thing happened in Chicago on Thursday, December 8. An audience of well-heeled professionals, a mixture of Democrats and Republicans, packed a room at the Drake Hotel to hear Robert Shiller, a Yale professor, give a presentation on the housing market. A few members of the audience were in the top 1%, and the balance of the audience was probably in the top 2%-5%. At the end of the presentation, there was a bi-partisan revolt.
The Chicago Mercantile Exchange (CME) and the Chicago Council on Global Affairs (CCGA) jointly sponsored the presentation. I'm a donor to CCGA's president's circle. Professor Shiller, deemed one of the country's foremost housing authorities, proposed a futures index for hedging and a new type of mortgage loan product along with some historical filler. In the context of our recent housing debacle, he never once uttered the word "fraud."
Fraud "Blind Spot"
Shiller's speech was 2 ˝ years after I appeared on C-Span talking about the many aspects of widespread interconnected mortgage fraud that damaged the global financial markets. I summarized fraud's significant role in the 2008 financial crisis in a book called Dear Mr. Buffett.
Shiller's speech was months after Congressional investigations showed how Wall Street firms provided financing for fraudulent loan activity of a number of different loan originators by creating fraudulent securitizations.
His speech was also months after widespread reports of robo-signing of affidavits and other types of foreclosure fraud. Banks showed up in court with fraudulent documents, which is fraud on the courts.
The Yale professor's speech was just four days after 60 Minutes blew open widespread loan origination fraud at Countrywide (video below). The firm created fraudulent documents. Separately it was reported that in Countrywide's Chicago office, 90% of loan applications were altered and income was sometimes inflated by Countrywide employees, not by borrowers. Countrywide settled a well-publicized fraud lawsuit for $8.3 billion with several states including Illinois.
Shiller's talk was the day after former Illinois Governor Rod Blagojevich was sentenced to 14 years in prison after his corruption conviction.
Shiller spoke on the same day that Jon Corzine, former CEO of bankrupt firm MF Global (former Democratic Governor of New Jersey, former Democratic Senator from New Jersey and former CEO of Goldman Sachs), testified before Congress that he had no intention to break the rules but he just doesn't know what happened to an estimated $600 million to $1.2 billion of customers' assets. Customers' money disappeared from segregated accounts that should have been intact but were not. See also: "Jon Corzine Dodges the Fraud Question," Huffington Post, December 9, 2011.
Audience Calls for Integrity
Michael Moskow, current vice-chairman and senior fellow on the global economy at CCGA and former head of the Chicago Federal Reserve, stood at the podium as Robert Shiller took questions from an upset audience. One attendee noted in an email to me that questioners were professionals, "not the Occupy Wall Street crowd who were accused of inciting 'class warfare' at the podium."
During the brief Q&A two men, one a former long-term Wall Street professional, asked questions about how we move forward when there is so little confidence. They cited the lack of integrity in the global financial markets.
After that, I asked how one creates a futures index (as Shiller proposed) in which one can have confidence without acknowledging the existence of fraud and vigorously prosecuting fraud. There was fraud by loan originators, fraudulent securitizations, and even fraud in the residential mortgage backed securities (RMBS) that backed a different hedging instrument, the ABX index.
The first time the word "fraud" was uttered that evening was when I posed my question.
Shiller himself never used "fraud." The most he would say in his so-called response was "some people aren't very nice." Really? It sounded rehearsed, and it struck most people in the audience as a shameful cop-out. If this is what economists are teaching students at universities, students should demand a refund of their tuition. Kindergarten children are given better warnings about strangers with candy.
"Countrywide Broke the Law. Homeowners Did Not."
Even worse Shiller, intentionally or otherwise, distorted my meaning. He claimed borrowers inflated income, without citing a source. Some of that occurred, but that wasn't what I referred to in my question. I corrected Shiller. I had clearly referred to instances where Countrywide altered documents and put in higher income amounts so that the mortgage loans would be approved for people that could not afford them. [Illinois Attorney General Lisa Madigan stated: "Countrywide broke the law. Homeowners did not."] Moreover, Shiller completely dodged the issue of fraudulent securitizations and foreclosure fraud.
CCGA and Academia Need to Get Their Crimes Straight
As if in a continuation of his answer to my question, Shiller mentioned he had spoken with a cab driver (apparently the source of all man-on-the-street information for academics) and the cab driver had no savings, only debt. Robert Shiller and Michael Moscow, the retired head of the Chicago Fed, appeared smug to me about this anonymous struggling working man's plight.
They seemed to be promulgating what Elizabeth Warren calls the "myth of the immoral debtor." Yet being in debt or even going bankrupt is not a crime in the United States. Loan originators' submission of fraudulent documents is a crime. Securities fraud is a crime. Foreclosure fraud is a crime.
Afterwards, several people came to me and to the other questioners. Much of the audience complained to CCGA's conference organizers. All were disappointed in Professor Shiller. A male CPA in the audience later contacted me via my website and wrote that he was glad I had put the question to Shiller: "though I have a great deal of respect for him, I was disappointed in his 'response' (if you could call it that)."
One woman who earned a Ph.D. in history found Shiller's response to me "incoherent:"
I was with my husband, brother, and his wife. I chatted with the stranger next to me and at least two people escaping at the same time [leaving after the speech]. No one could believe what a huge "fail" the evening had been...the failure of our political and expert classes to address the core issues...have alienated even those working in the financial industry--right up into the rung below the top of the food chain...this feels like the Ancien Régime's last days.
Class WarfareAlumni of the Federal Reserve, corrupt politicians, and willfully blind academics would be correct to say that evening was a case of "class warfare." Well-heeled U.S. patriots declared war on the lack of class demonstrated by their financial peers.
http://www.huffingtonpost.com/janet-..._1142946.html?